April 7, 1999

Mr. F. James Charney

Office of Management and Budget

Room 6025, New Executive Office Bldg.

Washington, D.C. 20503

Dear Mr. Charney:

On behalf of the Section of Public Contract Law of the American Bar Association ("the Section"), I am submitting comments on the above-referenced matter. The Public Contract Law Section consists of attorneys and associated professionals in private practice, industry and Government service. The Section’s governing Council and substantive committees contain a balance of members representing these three segments, to ensure that all points of view are considered. In this manner, the Section seeks to improve the process of public contracting for needed supplies, services and public works.

The Section is authorized to submit comments on acquisition regulations under special authority granted by the Association’s Board of Governors. The views expressed herein have not been approved by the House of Delegates or the Board of Governors of the American Bar Association and, therefore, should not be construed as representing the policy of the American Bar Association.

We are submitting comments on the proposed revision to OMB Circular A-110, "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations" published in the Federal Register (64 Fed. Reg. 5684-5685) on February 4, 1999. The proposed revision is intended to implement Pub. L. 105-277, which directed OMB to amend Section __.36 of Circular A-110 to require Federal awarding agencies "to ensure that all data produced under an award will be made available to the public through procedures established under the Freedom of Information Act (FOIA)."

The Section has several comments, set forth below:

The prevailing rule of administrative law is that changes in regulations apply only to contracts entered into after the effective date of the change. See, e.g., Lockheed Aircraft Corp. v. United States, 426 F.2d 322, 327-328 (Ct. Cl. 1970) ("The normal rule is for legislation and regulations to be applied prospectively to events and agreements which occur later."). The Supreme Court has noted that "[r]etroactivity is generally disfavored in the law." Eastern Enterprises v. Apfel, 524 U.S. 498, 118 S. Ct. 2131, 141 L. Ed. 451, 476 (1998) (holding that statute’s retroactive allocation of liability to Eastern violated Takings Clause of Constitution). Grant recipients and agreement participants subject to OMB Circular A-110 may have contract rights in data that can not and should not be affected by a change made after the grant or agreement was entered into and where the underlying work has been performed. We find no indication in the legislative history OMB has cited in support of the proposed rule that would require the proposed revision to apply retroactively. Accordingly, the proposed revision should apply only to new awards of grants and covered agreements entered into after the effective date of the final rule.

Existing Section .36 of OMB Circular A-110 provides, in pertinent part, that

The proposed revision deletes the above waiver provision, and infers that federal awarding agencies must obtain rights in all data produced under a grant or covered agreement; must physically obtain all the data, and then ensure that the data are made available through FOIA procedures. The proposed revision implies that federal awarding agencies no longer have the right to negotiate limited rights in data as part of the consideration for awarding grants or cooperative agreements.

First, this extreme position will have a fiscal impact by making the research prohibitively expensive or causing potential awardees to withdraw from Federal research altogether. Second, as a policy matter, requiring the Federal Government to disclose all data produced under grants and cooperative agreements is inconsistent with the goals of the Federal Technology Transfer Act, the Stevenson-Wydler Act, and subsequent technology transfer legislation. Third, as a matter of strict legal interpretation, that position is contradicted by several specific statutes that make clear that agencies may obtain less than unlimited rights for the government or that provide specific protections for release of grant or agreement-related data under FOIA. See e.g., the Bayh-Dole Act, (35 U.S.C. § 200, et seq.), the Advanced Technology Program statute (15 U.S.C. § 278n). There is no indication in the legislative history OMB has cited in support of the proposed revision that the legislation was intended to alter these pre-existing statutes. The amendment prompting the proposed revision did not expressly amend other statutes concerning rights in data. Cf. § 205 of the Bayh-Dole Act (stating that the "Act . . . shall be construed to take precedence over any future Act unless the Act specifically recites this Act and provides that it takes precedence over this Act").

The situation is at least unclear because OMB’s proposed revision provides that once the data are obtained from the recipient, the agency then has to determine whether the data constitutes a "record" under FOIA, and then to determine whether any of the FOIA exemptions apply to some or all of the data.

The proposed revision should be clarified to apply only to data produced under grants or agreements in which, under the terms of the agreement at issue, the Government expressly has rights. It should not apply to data for which the Government has not obtained rights under the terms of the grant or agreement at issue. The proposed revision should also make clear that the Government has the authority to negotiate less than unlimited rights, i.e., the ability to "waive" the right to obtain, reproduce or otherwise use all data first produced under an award, or to authorize others to use such data.

The proposed revision refers to data first produced under an award, and describes procedures for processing FOIA requests for "data relating to published research findings produced under an award . . .." OMB Circular A-110 contains no definition in section __.2 "Definitions" for the term "data," or these associated phrases. OMB should consider providing a definition. At a minimum, any such definition should make clear that it covers only technical data and computer software, and does not include information incidental to grant or agreement administration, such as financial, administrative, cost or pricing or management information. See generally FAR 27.401.

Alternatively, it may be appropriate that the definition of "data" be determined through negotiations on an agreement by agreement basis between the funding agencies and the award recipients.

There is no discussion in the material accompanying the proposed revision of Circular A-110 __.36 of the extent of the administrative and recordkeeping burden that the proposed revision is likely to impose on award recipients. These burdens potentially could be substantial. OMB should subject its proposed revision to a Paperwork Reduction Act review.

The apparent rationale for mandating that data produced under an award with a non-profit organization be made available to the public (so that the public has access to studies used by the Government to develop Federal policy) is not necessarily applicable to grants and similar agreements with commercial organizations which may be entered into for different purposes. The proposed revision should accordingly make clear that it does not apply to grants and agreements with commercial organizations.

The Section appreciates the opportunity to provide these comments and is available to provide additional information or assistance as you may require.